January 19, 2011 | In: Financial
BAC: Is the Bullish Trend Over?
I learned 2 things since I first started trading:
1- What goes up will go down (and vice versa).
2- BAC can be a dangerous stock.
I sold all of my BAC shares by the end of last month, at around $13.30. Almost a week later, the stock went up a buck, and then it went up another one the next week. Unfortunately, I knew this would happen, but I needed the money (yes, I committed the ultimate sin in stock trading and played with money I needed, and not with “so called” risk money). I felt huge regret for a week or so, until I thought there was nothing I could have done, I had to sell, I needed the money. The most stupid thing that anyone can do is sell stocks (with the exception of bearish ETFs) just before the end of the year; missing the January effect is not something that can win you the “smart investor of the year award”.
Now let’s go back to our main subject. BAC lost almost a $1 in 2 days, not a good thing. I guess what goes up fast goes down fast. Or is the flood of bad news in the last couple of days? Or is it that the hangover is over, and investors are back to their 2010 overly cautious selves?
I think BAC is at a critical crossroad right now, it already fell below the $15 level in these two days, and if it ends this week below the $14 level, then a new bearish momentum will start, and no investor will be able to predict when will BAC reach its real bottom (it fell below the $11).
To keep things in perspective, Citigroup is always known to perform (in the last couple of years) better than the Bank of America, and look at its results. Even GS earnings sucked (down 48% YOY). I’m sure that investors will not be pleased when Bank of America releases its earnings (if you can call them earnings).
I would stay away from this stock until I see a bottom. BAC’s next support is $13.99. Will it be able to hold it tomorrow?